In year 1 (the current year), XYZ Corp. made a non-cash char…
In year 1 (the current year), XYZ Corp. made a non-cash charitable donation of $200,000 to the Adkerson School of Accounting (a qualifying charity). For the year, XYZ reported taxable income of $1,600,000 before deducting any charitable contributions, before deducting its $20,000 dividends received deduction, and before deducting its $50,000 NOL carryover from last year. a) What amount of the $200,000 donation is XYZ allowed to deduct for tax purposes in year 1? b) In year 2, XYZ did not make any charitable contributions. It reported taxable income of $300,000 before any charitable contribution deductions and before a $15,000 dividends received deduction. What book-tax difference associated with the charitable contributions will XYZ report in year 2? Is the difference favorable or unfavorable? Is it permanent or temporary?
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